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(Kattukkavil Kizhukkepai) Nangunni Kovillamma and ors. Vs. (Keli) Nedungadi - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1929Mad860
Appellant(Kattukkavil Kizhukkepai) Nangunni Kovillamma and ors.
Respondent(Keli) Nedungadi
Cases ReferredIn Indrajit Pratap v. Amar Singh A.I.R.
Excerpt:
.....equitable doctrine that if a stranger pays off a mortgage on an estate he presumably does not intend to discharge that mortgage, but to keep it alive for his own benefit. the recitals in this document make it perfectly clear that the intention of defendant 1 was to keep alive the mortgage. 128, the judicial committee have clearly stated that there is no such restriction on our power as has been suggested;.....of defendants 13 to 16 who are members of defendant l's tarwad. they plead that items 1 and 2 are tarwad properties and the mortgage to defendant 11 (evidenced by ex. a) was not made for tarwad necessity. the lower courts have found, and the finding is conclusive, that the properties are the jenm properties of the tarwad and the mortgage was not executed for any purpose binding on it.4. the matter, however, does not stop there. some other facts have to be narrated which have a bearing upon the issue to be decided. over these very properties a mortgage had been previously created in 1878 by the then karnavan in favour of a nambudiri. this mortgage was redeemed by defendant 1 in 1898 and in his favour the nambudiri mortgagee executed a deed giving up his rights. that deed (ex. e-2) is.....
Judgment:

Venkatasubba Rao, J.

1. This is a Letters Patent Appeal from the Judgment of Devadoss, J., and raises a question relating to the doctrine of subrogation.

2. We are concerned with two sets of properties, the first sot comprising items 1 and 2 and the second items 3 to 7. We may at once dispose of the appeal, so far as it relates to the properties in the second set, with the remark, that there is a concurrent finding of fact that they are the self-acquisitions of defendant 1 and that finding cannot be disturbed in second appeal.

3. Now as regards the first set, the facts are these. Defendant 1 executed in 1911 a usufructuary mortgage (Ex. A) in favour of defendant 11 for Rs. 4,000. As a part of the same transaction, the latter gave the mortgaged properties on lease to defendant 1 and he has throughout been in possession. Defendant 11 in 1914 assigned his right to the plaintiff who claims in this suit possession and rent. The main contest is that of defendants 13 to 16 who are members of defendant l's tarwad. They plead that items 1 and 2 are tarwad properties and the mortgage to defendant 11 (evidenced by Ex. A) was not made for tarwad necessity. The lower Courts have found, and the finding is conclusive, that the properties are the jenm properties of the tarwad and the mortgage was not executed for any purpose binding on it.

4. The matter, however, does not stop there. Some other facts have to be narrated which have a bearing upon the issue to be decided. Over these very properties a mortgage had been previously created in 1878 by the then karnavan in favour of a Nambudiri. This mortgage was redeemed by defendant 1 in 1898 and in his favour the Nambudiri mortgagee executed a deed giving up his rights. That deed (Ex. E-2) is known as ozhimuri (release or surrender deed). The plaintiff's contention may be thus stated. The result of these transactions was, that defendant 1 was subrogated to the position of the original mortgagee, that is the Nambudiri, and that the former's transaction in favour of defendant 11 (Ex. A) was in effect a sub-mortgage of his mortgage right. If this contention is correct, the claim of defendants 13 to 16 must fail. Devadoss, J., upholding that contention decided the appeal in favour of the plaintiff. We agree with his decision, although not with some of his reasons.

5. The learned Judge looked at Ex. E-3, a certain document of 1907, executed by defendant 1, in order to ascertain whether his intention in obtaining the ozhimuri nine years previously, was or was not to keep alive for his own benefit, the mortgage originally executed in favour of the Nambudiri. We desire to express no opinion whether this course was right or not. The very ozhimuri contains in our opinion sufficient indication of defendant l's intention. Care was taken to mention in it, that while the properties belong in jenm to the tarwad, the money that was applied in discharge of the mortgage, was defendant 1's self-acquisition. Why should such a recital be made, except for the purpose of showing that he did not intend to extinguish the mortgage but to keep it alive for his own benefit? We are not prepared to agree with the contention that the very expression ' ozhimuri ' connotes that there was an extinction of the mortgage. True, in a sense the mortgage was put an end to; that is to say, the rights of the Nambudiri came to an end. But that was because his rights were transferred on redemption to defendant 1. At best it may be suggested that the wording of the deed is not conclusive on the point. If that be so, we have to apply the well known presumption referred to by the Judicial Committee in their judgment in Gokuldoss v. Rambux [1885] 1 P.C. 1035 (of 11 I.A.):

The obvious question to ask in the interests of justice, equity, and good conscience, is, what was the intention of the party paying off the charge. He had a right to extinguish it and a right to keep it alive. What was his intention? If there is no express evidence of it, what intention should be ascribed to him 1 The ordinary rule is that a man having a right to act in either of two ways, shall be assumed to have acted according to his interest.

6. Is there anything in. this deed to rebut this presumption? That is the way in which the question must be approached. It was to the manifest advantage of defendant 1 to keep the mortgage alive and he must be therefore assumed to have acted according to that interest.

7. To apply a different rule, in the words their Lordships, seems likely : ' not to promote justice and equity but to load to confusion, to multiplication of documents, to useless technicalities, to expense, and to litigation. '

8. The next question we have to decide in regard to the application of the rule of subrogation is, does it extend to one in the position of defendant 1? Our answer must be in the affirmative, having regard to the authorities on the point. In Chamaswami v. P. Anandu [1908] 31 Mad. 439, the question arose in regard to the rights of a purchaser who paid off an encumbrance, it having been found that his* purchase was invalid. The learned Judges Wall is and Munro, JJ., held that the purchaser stood in the shoes of the mortgagee whom he had paid off. We extract the following passage from their judgment:

The American Courts apply to oases of this kind an equitable doctrine of subrogation borrowed from the Civil Law, and when equity requires it, allow persons paying off-mortgages on properties which do not belong to them, to be subrogated to the rights of the -original mortgagees. This right of subrogation is not extended to mere volunteers who pay off other people's debts without having any concern in them. This was held by the supreme Court in Aetna Life Insurance Co. v. Middleport 121 U.S. 534, but in the course of their judgment in that case the learned Judges cite with approbation a passage from Sheldon on 'Subrogation' in which subrogation is allowed as a matter of right for the benefit of a; purchaser who has extinguished an encumbrance on the estate which he has purchased. We think this is the right principle to apply.

9. According to this passage, the right of subrogation extends to strangers provided they are not mere volunteers, that is, persons who pay off other people's debts without having any concern in them. Defendant 1 was purely not a volunteer; indeed, he was not even a stranger, possessing as he did, as a member of the tarwad an interest in the property to protect.

10. In this connexion, it may be found useful to quote a passage from an American case which is cited in the judgment of Sundara Aiyar, J., in Nara-yana Kutti v. Pachi Ammal [1912] 36 Mad. 426.

We think the safer and better rule to be,, and we therefore, hold, that a subrogation will arise only in those cases where the party claiming it advanced the money to pay a debt which in the event of default by the debtor, he would be bound to pay or where he had some interest to protect, or where he advanced the money under an agreement, express or implied, made either with the debtor or creditor, that he would be subrogated to the rights and remedies of the creditor : (at p. 432).

11. Sundara Aiyar, J., after citing this passage proceeds to say that the rule is stated in similar terms by Sheldon in his Book on Subrogation. Though this statement of the law was doubted by that learned Judge, it was the very proposition that received the approval of the Bench that decided Chamaswami v. Anandu already referred to. This also seems to be in consonance with the rule recognized in the English cases. In Butler v. Rice [1910] 2 Ch. 277 the following observation occurs.

The statement of claim proceeds on the well known equitable doctrine that if a stranger pays off a mortgage on an estate he presumably does not intend to discharge that mortgage, but to keep it alive for his own benefit.

12. The word 'stranger' in this passage is presumably used in the sense that he is not a mere volunteer. The view we are taking is also supported by the decision in Arumugha Pandaram v. Periasami Nadan (S.A. No. 1267 of 1923), unreported.

13. It is contended for the appellant that the law of subrogation is contained in two Sections 74 and 101, T.P. Act. But subrogation is a doctrine of equity and the sections referred to do not profess to exhaustively deal with all aspects of that doctrine. Next, it is contended that Section 95 is a bar to the right of the plaintiff. It says, where one of the several mortgagors redeems the mortgaged property, he obtains a charge on the shares of the other co-mortgagors. The argument is, that if defendant 1 obtained such charge, the remedy is barred. It is unnecessary to deal with the question whether a mortgagor in the circumstances contemplated in Section 95, obtains merely a charge or a higher right; for, in our opinion, the section is inapplicable to the case. Defendant 1 was not one of several mortgagors, but he was a member of the tarwad which owned the property mortgaged by a previous karnavan. He had an interest in the property and a right to protect it. The conclusion of Devadoss, J., is correct and the appeal is dismissed with costs.

14. Before closing, we must refer to an application by the respondent. He applied for permission to use as evidence a document bearing the dated 29th January 1898, that is, two, days later than the date of the ozhimuri. This may be regarded more or less as being contemporaneous with the ozhimuri. The recitals in this document make it perfectly clear that the intention of defendant 1 was to keep alive the mortgage. The appellant contends that this document cannot at this stage be admitted. We do not think there is any force in this contention. In Indrajit Pratap v. Amar Singh A.I.R. 1923 P.C. 128, the Judicial Committee have clearly stated that there is no such restriction on our power as has been suggested; but we have come to a decision in favour of the respondent independent of the document now sought to be filed. In our opinion, it is therefore unnecessary to admit this additional evidence and we merely desire to express the view that if it became necessary we should certainly have admitted it. The plaintiff was a stranger to the family and had justifiable grounds for not being aware of the existence of this deed. Even defendant 1 was colluding with and supporting the claim of his relations the other members of his tarwad.

15. The appeal and the memorandum of objections are dismissed with costs.


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